Costa del Sol's Property Specialists

Buyers Tips

Buying a property in Spain, like anywhere in the world, has its peculiarities and potential pitfalls. Even though there are countless and well documented books and internet articles that have been written about buying properties on the Costa del Sol, it is impossible to cover all aspects of the real estate operations in Spain.

It is important to remember that the real estate market in Spain is a forever changing one with local Town Halls constantly updating or modifying the property laws and regulations. For this reason alone, every foreign buyer should be as informed as possible about all the important aspects of the property purchasing process as well as have a property professional on their side to ensure that they are protected.

Before jumping into a Spanish property deal, there are many practical issues that a buyer must consider and below we have highlighted various points that should be taken into account. Clients of P.S.I benefit from our in-depth and vast property experience and these points below must be taken into consideration by any foreign buyer in the property market.

1. N.I.E. Number: Número de Identidad de Extranjero

When you come to live and/or work in Spain you immediately have to apply for the N.I.E. number. You need this number to do anything fiscal in Spain. You can either try to obtain it yourself by going to the National Police station and collect the application form, or get a "Gestor" (a fiscal adviser) to do it. He will charge you for this, but it saves you going to the police station, queuing up very early in the morning and explaining in Spanish what it is you are looking for.

Once you have completed this form you need to take it back to the National Police station together with a copy of it as well as your passport together with a copy. You then return approx. 1 month later to collect the number.

You need a N.I.E number to:

Open a bank account.

Buy, sell or insure property.

Arrange credit terms or a mortgage.

Pay taxes.

Be paid for employment.

Apply for a business permit.

Register with social services.

Apply for a driver’s licence.

We advise all our clients not to sign any “Arras” agreements until they have their N.I.E number, especially if the buyer requires finance or loan from a bank. It is important to remember that an application for the N.I.E. can take up to 6 weeks to complete and a notary will not allow a foreign property buyer to inscribe their property in the central Register Office without an N.I.E.

If a foreign buyer signs the “Arras” agreement without having their N.I.E. then they risk being in a position of possibly losing the “Arras” deposit because a bank will not grant finance and a notary will not allow for the property transfer.

2. Bank Accounts

You cannot own a property in Spain without an active bank account because all community charges, utility bills (gas, water and electricity) and local property taxes are taken from the account via a direct debit. Again, if you require bank finance then it is essential you have the bank account open before you start viewing properties or plots of land.

Banks in Spain are only open from Monday to Friday until 14:00 and activating an account is simple as it just involves filling out some paperwork with your passport or N.I.E. and depositing a small amount such as 50€.

3. Cash Deposits

With so much property along the Costa del Sol, we always advise our clients to have cash sitting in their Spanish bank account in the event a small reservation deposit is necessary for a potential property. The “good value” properties do not last long and in many cases it’s best to go directly to the seller’s agency office to place a reservation deposit and secure the property. It is not always recommended paying reservation deposits on the spot to secure a property, but sometimes this might be the quickest way to secure the deal even though there are other ways that this can be done.

It is essential that foreign buyers have an independent property professional by their side before paying any reservation deposits or signing any purchasing agreements - this is where P.S.I can help!

4. Securing the Property

There are many stories of buyers being “pressured” by the seller’s agency or representative into buying a property, but we always advise our clients not to make such an important decision without be 100% certain that the potential property is what they want. The common line of “there is another buyer interested in the same property” has been used far too many times to create a sense of urgency during the “boom years” to get buyers to go to the agency office and place a reservation deposit to secure a property.

However, since 2008 the property market has slowed down, and we believe there is no need to rush into such a big decision based on emotion and without having all the facts. That is why we at P.S.I always advise our clients, even during our property search service, that good properties still sell relatively fast but with us beside you we can help you analyse the situation to make a quick decision.

5. Don’t Believe Everything You Hear

Not something new, but real estate agents on the Costa del Sol will say anything to convince a foreign buyer to purchase a property. Having P.S.I by the buyer’s side will help shield and protect the client from the sales propaganda. Real estate agents like to operate at a high level of enthusiasm, so that if you show any sign of interest in a property that they will tell you whatever you want to hear. But remember that everything the seller or by their agent says must be 100% confirmed.

6. Visit More Than Once

Strangely enough we have come across many buyers who have only visited a property once, bought it and then started to find problems and concerns after they had returned to the property for the second time.

We advise our clients that they should visit the property during the day time, night time, weekends, walk around the area, visit nearby streets, etc as a neighbourhood could feel completely different during the day than at night.

7. A Contract Person

If a property owner is based abroad, the day to day ownership of the home can be complicated especially if they are planning to do some reform work, short term rentals, dealing with the neighbours or a simple thing as collecting the mail.

Having a local advisor on the ground can be helpful when it comes to letters received from the Town Halls, understanding the community body and their rules or just everyday issues that come with owning a Spanish property.

8. Local Lawyers

The fact that a local lawyer might speak your language does not mean the buyer is protected during the property purchase. Unlike other European countries, the Spanish lawyer does not deal with property law as part of their daily function, but instead it is the real estate agent that prepares all the paperwork. Unfortunately because local lawyers do not deal with property transactions on a daily basis, they tend to over protect their clients which in many cases have resulted in foreign buyers pulling out of a deal due to a minor complication. However in actual fact all that was needed was some communication to find a suitable solution for both parties.

9. Have Approval for Bank Finance in Place

It is extremely important that buyers get their bank financing approved before signing any “Arras” agreement. During the property “boom” years along the Costa del Sol, banks were very competitive in approving loans but since 2008 Spanish banks are very cautious in handing out property finance.

P.S.I recommends to all their clients that even before starting a property viewing tour that the buyer should visit their bank and have property financing in place.